Canadian Dollar Outlook: USDCAD Eyes GDP Data and FOMC Decision
Canadian Dollar (CAD) Prices, Charts and Analysis:
- Canadian growth is expected to slow in May to just 0.1% (m/m)
- USDCAD buffeted by Canadian data and Fed rate decision.
Canadian GDP/US FOMC Will Drive the Next Move in USDCAD
Market expectations are for Canadian GDP to slow markedly in May, to just 0.1% from a prior month’s print of 0.3%, dragging annual growth down to 1.3% from 1.5% Data released at 12.30 GMT). Ongoing global trade tensions are weighing on the economy with the Bank of Canada (BoC) highlighting recently that trade conflicts, “between the United States and China, in particular, are curbing manufacturing activity and business investment and pushing down commodity prices”. After hiking rates interest rates by 0,25% three times last year, the BoC will carefully monitor today’s release to see if their monetary policy remains appropriate as global headwinds continue.
USDCAD traders will also be closely monitoring the latest FOMC rate decision later in the session where the Federal Reserve are fully expected to cut interest rates by 0.25%. USDCAD has recouped some of its recent losses after having printed a 10-month low around 1.3016 on July 18. If Canadian GDP beats expectations and the US cut rates, USDCAD may look to re-test the recent low as the interest rate differential between the two currencies narrows further.
Keep up to date with all key economic data and event releases via the DailyFX Economic Calendar
USDCAD Daily Price Chart (January – July 31, 2019)
Retail traders are 38.9% net-long USDCAD according to the latest IG Client Sentiment Data, a bullish contrarian indicator. However recent daily and weekly positional changes give us a stronger USDCAD bullish contrarian trading bias.
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